Failed Newspaper Business Models Are Crippling UK Democracy – Forbes

The present and future of newspapers is grim Photo: ROBERT BODMAN/AFP/Getty Images

I’m standing next to an editor, surveying the newsroom of Silicon Valley’s main newspaper. It’s the 1980s and I’m a young journalist just joining the staff. I notice a reporter whose desk is overflowing with hard-bound books, city reports and government documents, her face buried in spreadsheets.

“Wow, what’s she working on?” I ask.

“Oh,” the editor answers, “she covers a town in the valley and she’s obsessed by its municipal bonds.”

A premier local reporter, she was a newsroom legend for her pit bull-like doggedness chasing corruption in local government and doing the classic journalist’s job: Holding power to account. She had exposed local, state and national government shenanigans, bringing down a federal judge, a dirty businessman and the town’s mayor in the process – all of which resulted in better governance and fairer justice.

Later we worked together for a full year on a single project, documenting how inefficiency, incompetence and corruption in language translation in state criminal courts was leading both to wrongful convictions and freeing of criminals.

I’m reminded of her and this kind of resource-intense, bottom-line-hurting reporting – essential functions for newspapers to fulfill their critical role in healthy societies – with the publication this week of a frankly depressing new study conducted by the London Assembly Economy Committee – which warns that the waning of local reporting is actively threatening Britain’s democratic future.

What especially caught my eye was feedback from newspaper professionals referring to the inexorable shift from revenue-starved print newspapers to digital operations – and a consequential weakening of the kind of “on-the-ground” and investigative reporting that I was privileged to perform in the pre-digital age.

“The cumulative effect is the potential for a democratic deficit as local newspapers scale back their campaigns, coverage of courts, and scrutiny of council activity,” committee chair Fiona Twycross wrote in the study. “A strong local news industry is essential to our local democracy in London. Without addressing the challenges that the industry is facing and finding solutions, we are at risk of losing one of our most important democratic functions.”

For example, Hannah Walker, editor of the London Weekly News, told the committee that local papers are forced to “pick and choose” what they can justify covering based on their finances.

“I cannot afford to lose a reporter for three days not being productive,” she said.

The editor of another local paper, the Camden New Journal Group, complained that lack of resources have crippled the in-depth reporting of the past. “The fact is that over the years there are fewer journalists and therefore, of course, what you call investigative reporting is now much less often done than it used to be years ago,” said Eric Gordon.

The industry continues to struggle to find viable business models to support quality journalism – and the kind of reporting that the committee has identified as fundamental to healthy democratic systems.

Consolidation in the industry in both countries, for example, as well as cost cutting has seen the number of local newspaper reporters slashed drastically. In the U.K., local reporting headcount has plummeted by more than half since 2005 – not counting editors, copy editors, designers and photographers.

The U.K.’s National Union of Journalists says the cuts have hit particularly hard in London, where the number of local journalists has dropped and those at work contend with poor pay and work conditions – which discourages new recruits to the profession.

The London study cites work by King’s College London that found one major chain of local papers, Johnston Press, whacked its editorial and photography staff by 40% between 2010 and 2014 in order to maintain a 20% profit.

The majority of local newspapers have seen their circulation fall in recent years as print readers both migrate to the web and quite literally die off. The circulation of five of London’s paid-for newspapers collapsed by more than half between 2005 and 2016.

And while many are enjoying growing digital readership, the traditional advertising revenue model is not translating equally to the online world as newspaper revenues generally are declining radically. In the five years to 2010, for example, revenue of the four top British newspaper owners slid between 23% and 53%, according to one analysis.

But local newspapers, which depended on classified advertising – once lauded by Rupert Murdoch as “rivers of gold” – as their lifeblood, have taken the hardest hits in advertising.

The report notes that spend on regional newspaper advertising fell by 17% in just two years, from 2014-2016, as buyers move online.

Said Ceri Gold, editor-in-chief of Trinity Mirror: Of “the traditional pillars that local newspapers used to cleave to for their revenue, property has gone (online) to Rightmove, motors has gone (online) to Auto Trader and 95% of our jobs revenue has gone (online) to a local jobs board.”

She said the company’s strategy is to transition to the “point where the digital revenue outweighs the print decline.”

That said, it’s far from clear how or how long it will take them and the industry as a whole to get there. So far, according to Angela Phillips of Goldsmiths University, the industry has “totally failed” to develop new revenue streams, leading to the “erosion of the funding base for local newspapers.”

“This is not a failure of journalism – which it is often described as being – it is a business failure,” she told the committee, noting that the response of the big chains has been “to cut, cut, cut, so that we end up with (newspaper) chains across south London with practically no journalists.”

Part of the problem is that Google and Facebook are eating a significant portion of newspapers’ lunch. In the U.K., they siphon off around half of the £4 billion spent annually on digital advertising – a figure one consultancy estimates will rise to 70% by 2020. “That doesn’t leave a lot of space left elsewhere,” the report notes.